London midday: Stocks turn lower; UK construction PMI in focus

(Sharecast News) - London stocks had turned sharply lower by midday on Thursday, led by Asia-focused banks, while oil prices fell on news that Israel and Lebanon have agreed a US-brokered ceasefire.

The FTSE 100 was down 0.7% at 10,259.67, while Brent crude was 1.4% lower at $96.49 a barrel on news of the ceasefire, which is contingent on a complete cessation of fire from Iran-backed Hezbollah and the evacuation of all Hezbollah operatives from the South Litani area.

"The two sides agreed with the guidance of the United States to swiftly advance the creation of pilot zones in which the Lebanese armed forces will take exclusive control of the territory to the exclusion of all non-state actors," the US State Department said. "These steps will enable progress towards a comprehensive peace and security agreement."

Israel and Lebanon will reconvene on 22 June "with a view toward reaching a comprehensive agreement", the US said, adding that it has agreed to continue facilitating communication between the two parties.

As far as the US-Iran conflict is concerned, Richard Hunter, head of markets at Interactive Investor, said: "There have been numerous reports of renewed strikes between the US and Iran, mostly drone-driven, and there is little evidence to suggest that any meaningful progress is being made on negotiations, despite the President's protestations (again) that something could happen 'this weekend'."

On home shores, a survey showed UK construction output fell in May at the fastest pace in six years.

The S&P Global construction purchasing managers' index fell to 38.2 from 39.7 in April, coming in below the 50.0 mark that separates contraction from expansion for the 17th month in a row.

It was also the steepest rate of contraction since May 2020. Aside from the drop in construction output at the start of the pandemic, the latest fall was the fastest since March 2009, S&P said.

All three broad categories of construction work posted sharp declines in output, with residential activity the weakest-performing segment and survey respondents pointing to unfavourable market conditions and headwinds from high borrowing costs.

Tim Moore, economics director at S&P Global Market Intelligence, said: "House building remained especially subdued, and there were fresh challenges in the construction sector from a considerable softening of commercial activity since April.

"Anecdotal evidence suggested that economic uncertainty and rising inflation in the wake of the Middle East conflict had triggered the steepest drop in new work since the beginning of the pandemic. Elevated borrowing costs were also reported to have impacted market conditions.

"Fuel surcharges and rapid increases in prices for energy-intensive raw materials continued to be felt across the construction supply chain. Overall purchasing costs rose to the greatest extent since June 2022, while international shipping delays meant that suppliers' delivery times lengthened for the third month running."

Moore said concerns about a prolonged decline in construction order books, along with unfavourable near-term UK economic prospects, weighed on business optimism last month. "This index has fallen sharply since the start of 2026, and confidence levels are now almost as low as those seen ahead of last autumn's Budget," he said.

In equity markets, Asia-focused Prudential, Standard Chartered and HSBC were the worst performers on the FTSE 100 following a report that some banks have suspended opening Hong Kong bank accounts for mainland China clients that could be used for overseas investments.

Ceres Power also slumped after a rating downgrade at Panmure Liberum.

On the upside, JD Sports Fashion rallied following a Sky News report it is exploring a sale of the wholesale business which owns a licence to the Billionaire Boys Club streetwear brand founded by music star Pharrell Williams.

CMC Markets surged after saying it expects fiscal 2027 net operating income to increase by at least 17% to between �460m and �480m as it posted a rise in profits for the 12 months to the end of March. Pre-tax earnings grew 20% to �101.3m and net operating income 15% to �392.6m driven by volatile markets.

On the downside, Sainsbury's, Vodafone and LondonMetric all lost ground as they traded without entitlement to the dividend.

Mitie reversed earlier gains despite saying it had started the current year on the front foot, after posting a jump in annual earnings.

Market Movers

FTSE 100 (UKX) 10,259.67 -0.70%

FTSE 250 (MCX) 23,143.07 -0.19%

techMARK (TASX) 5,945.98 -0.39%

FTSE 100 - Risers

Relx plc (REL) 2,505.00p 3.00%

JD Sports Fashion (JD.) 85.94p 2.97%

3i Group (III) 2,188.00p 2.82%

Autotrader Group (AUTO) 455.70p 2.52%

London Stock Exchange Group (LSEG) 8,910.00p 2.37%

Entain (ENT) 565.80p 2.06%

Berkeley Group Holdings (The) (BKG) 3,456.00p 1.82%

Barratt Redrow (BTRW) 261.60p 1.67%

Experian (EXPN) 2,560.00p 1.67%

Rightmove (RMV) 437.40p 1.58%

FTSE 100 - Fallers

Prudential (PRU) 967.00p -7.98%

Standard Chartered (STAN) 1,863.00p -6.54%

HSBC Holdings (HSBA) 1,317.20p -4.37%

Antofagasta (ANTO) 4,144.00p -3.19%

Rio Tinto (RIO) 7,816.00p -3.06%

Vodafone Group (VOD) 110.05p -2.87%

Sainsbury (J) (SBRY) 296.30p -2.69%

British American Tobacco (BATS) 4,314.00p -1.91%

Anglo American (AAL) 4,022.00p -1.80%

Games Workshop Group (GAW) 19,020.00p -1.55%

FTSE 250 - Risers

CMC Markets (CMCX) 426.00p 15.90%

B&M European Value Retail (BME) 210.20p 7.47%

HGCapital Trust (HGT) 408.50p 5.83%

Ninety One (N91) 218.60p 3.21%

Applied Nutrition (APN) 284.25p 2.99%

Trustpilot Group (TRST) 245.80p 2.50%

WH Smith (SMWH) 516.00p 2.48%

Vistry Group (VTY) 263.80p 2.41%

Hays (HAS) 34.10p 2.28%

SSP Group (SSPG) 168.80p 2.06%

FTSE 250 - Fallers

Ceres Power Holdings (CWR) 702.00p -9.89%

Raspberry PI Holdings (RPI) 830.25p -5.60%

AEP Plantations (AEP) 1,576.00p -3.90%

SDCL Efficiency Income Trust (SEIT) 44.60p -3.88%

Partners Group Private Equity Limited. (EUR) (PEY) 8.70p -3.76%

Foresight Environmental Infrastructure Limited (FGEN) 80.20p -3.61%

XP Power Ltd. (DI) (XPP) 1,808.00p -3.32%

Patria Private Equity Trust (PPET) 602.00p -2.90%

Polar Capital Technology Trust (PCT) 706.00p -2.88%

Allianz Technology Trust (ATT) 732.00p -2.78%